On the back of recent and significant new debates on the use of history within business and management studies, we consider the perception of historians as being anti-theory and of having methodological shortcomings; and business and management scholars displaying insufficient attention to historical context and privileging of certain social science methods over others. These are explored through an examination of three subjects: strategy, international business and entrepreneurship. We propose a framework for advancing the use of history within business and management studies more generally through greater understanding of historical perspectives and methodologies.

Recently Martin Parker (Bristol) has taken to the airwaves promoting the idea of bulldozing the business school. In sharp contrast, Andrew Perchard, Niall McKenzie, Stephanie Decker, and Giovanni Favero make a compelling case for certain disciplines in the management sciences to open themselves to alternative methodological and epistemological approaches. They argue that the fields of strategy, international business, and entrepreneurship have not embraced historically-oriented research to the same extent as other fields within business and management studies. The authors also admit that many scholars conducting historical business research have not made a sufficiently solid case about the robustness of their historical methodology(s) or data to convince other social scientists about the validity of their claims. Drawing upon an impressive range of previous works to develop their discussion, the paper attempts to reconcile these discrepancies to highlight how a more explicit articulation of the historian’s process could overcome the concerns of ‘mainstream’ management scholars regarding theorization and methodology in these three fields specifically and in management studies generally.

One major concern held by non-historians is that historical work illustrates an alleged a-theoretical or even anti-theoretical nature of scholarly writing (Duara, 1998). A second major concern is that historical methods (i.e. of data collection) are not sufficient grounds upon which to base management theory. The authors demonstrate the complexities of these issues with respect to existing historical work in business and management studies, such as the ‘cherry-picking’ of outlier events to support a more general point – especially by scholars in other fields applying historical methods rather casually – and place responsibility upon business and management historians to make their process(es) more transparent and explain themselves and their work better to other social scientists. The article claims that the “continuing distinctions drawn between the primary data created by social science research…with the collection of ‘secondary’ documentary evidence in archives…are misleading.” (p. 915). Whereas social science researchers will be aware explicitly about potential sources for bias in their data and often include discussions about this in their work, the historical process ‘internalizes’ these judgements and thus appears to hide them from the reader. The discipline of history, so accustomed to the individual historian’s assessment of the materials being examined, assumes that with satisfactory preparation the historian’s assessment will be reasonable based on her (or his) knowledge of the historical context, the actors involved, and assumptions about the rationality and practicality of the various decisions that might have been made at any particular point in the timeline. But it is this internalization of decision-making and assessment which so troubles non-historians and why the authors call for business and management historians to “more clearly articulate the methodologies adopted by historians to show the value of history to business and management studies…” That there is value to be realized is shown through the acceptance of historical approaches by other branches of the management studies arena, and their point is that these three sub-fields have been slower to warm to their use than others.

The major difficulty here lies in the way data are encountered: the social scientist generates new ‘primary’ data through his or her interaction with respondents whether actively (through interviews or questionnaires) or passively (through observation). Given the nature of historical work, of course this style of primary data generation is seldom possible: all the protagonists are gone and even the organization(s) to which they were affiliated may have disappeared or transformed beyond anything the historical actors could have imagined. Indeed even the labels of what constitutes ‘primary’ and ‘secondary’ data differ between historians and other groups of social scientists. What the historian then faces is piecing together traces of the past much like an archaeologist might do when exploring new ruins. The main difference is that the business historian deals with written records while the archaeologist deals with physical remains, but in both cases often as much (or more) remains hidden as is brought to light in the process of discovery. This process, and the gaps in data continuity that it allows, appear to bother social scientists whose epistemological approach is steeped in the rationalist arguments of the physical sciences and applies only to the data they have actively sought to collect. That other elements can be discarded as irrelevant to the analysis likewise troubles historians for whom contingency and context are vitally important pieces of the story.

There are a number of significant factors here which the article discusses at some length, but what is striking about the discussion is that there is, perhaps ironically, seemingly little consideration for how these disciplines arose and evolved over time and whether these differences in development might be at the root of the issue. History as an activity reaches back to antiquity but the modern discipline of history received fresh articulation in the early nineteenth century. In contrast, the fields one might ascribe to the ‘social science’ area relevant to business and management (anthropology, communications, economics, geography, sociology, and psychology, for example) tend as a group to be newer and as part of their growth had to justify space in the academic environment for themselves. The process of doing so led these fields to ally themselves with the methods and approaches of the physical sciences to gain scientific credibility in a way that the traditional subject of history never did. The discipline of history, and by extension business and management history, is now playing a catch-up game to find ways to articulate and justify its value as a discipline in the face of criticism from practitioners in other fields. Perchard et. al. try to move this process forward by explaining to historians how their work could or should be explained differently (not necessarily done differently) to assist non-historians in assessing and appreciating its value. Here they remind us of the work of Andrews and Burke (2007) whose ‘five Cs’ (change over time, causality, context, complexity, and contingency) provide a useful guide to help non-specialists appreciate the aspects that historians are likely to fix upon as explanatory variables. The authors also point to the work of Jones and Khanna (2006) and Maclean, Harvey, and Clegg (2016) as helpful in making historical work relevant to mainstream business and management studies.

The article is a valuable contribution to the on-going effort to bring management and business historians closer to those studying and theorizing about management and business activity. Its relevance touches on a number of critical issues both in the academic field of study and related to the career development of those engaged in this kind of research.

Researchers working in the interdisciplinary field of ‘economic, business and financial history’ come from at least two different disciplinary backgrounds, namely history and economics. These two backgrounds may lead to differences in research practices, as there are potentially other demands for tenure and promotion requirements. We performed a survey to assess whether there is heterogeneity in the submission and publication culture (i.e. one multi-faceted culture, or simply multiple cultures) between respondents working in an economics versus a history department. Among other things, we found differences in their motivation for publishing, the type of publications they aim for, and their journal selection strategies. Our results show that the department the respondents work at—irrespective of their disciplinary focus and background—determinesmost of their research and publication decisions. Hence working successfully in an interdisciplinary field or working in a department different from the main field of research requires researchers to learn the (in)formal rules and practices of an unfamiliar field.

Published on: Essays in Economic & Business History (2016) Volume XXXIV pp. 95-135.

In this contribution, we measure how long researchers are willing to wait (WTW) for an editorial decision on the acceptance or rejection of a submitted manuscript. This measure serves as a proxy for the expected value of a publication to a researcher in the field of economic, business and financial history. We analyze how this WTW measure varies with the characteristics of the submitting authors themselves. We distinguish the impact of personal characteristics (including age, gender and geographic location) as well as work-related characteristics (including research discipline, affiliation and academic position). To identify the factors determining economic history authors’ WTW for editorial decisions, we use a valuation technique known as stated choice experiments. Our results show that respondents found the standing of the journal to be at least as important as its ISI impact factor. Moreover, we find differences in publication culture between economic and history departments. Overall, researchers’ willingness to wait is influenced to a greater extent by the research discipline in which the respondents are active (history vs. economics), than by their personal characteristics (e.g. the education or the type of Ph.D. they obtained).

Summarised by Eline Poelmans and Sandra Rousseau

Overview

When authors choose a journal to submit a manuscript, the submission process is influenced by several author and journal characteristics. Also time pressure is an influencing factor, since academic job offers, promotions and tenure decisions tend to be based on researchers’ publication and citation records. Hence, both journal editors and prospective authors want to reduce the time between the initial submission and the final editorial decision.

Moreover, within interdisciplinary fields – such as the field of ‘economic, business and financial history’, a field at the intersection of two major social sciences – there can be large differences in both research attitudes, skills, focus and practices depending on the different backgrounds of researchers (such as having a PhD in history or in economics) as well as varying requirements for tenure, promotion or funding in the different departments the researchers are working (such as the department of history versus that of economics) that can also influence an author’s submission and publication decisions.

In the first paper, the authors conducted a survey to investigate whether working in the interdisciplinary field ‘economic history’ implies an additional challenge to the researcher in this field compared to those working in a more homogeneous field. The authors used data in order to quantify this heterogeneity (or ‘duality’) of the publication culture in economic history by investigating the impact of the disciplinary focus of researchers’ doctoral dissertation and current affiliation (history, economics or other) on respondents’ submission and publication behavior: their preferred publication outlets, their reasons for publishing, and their journal selection strategies.

In the second paper, the authors assessed the impact of time constraints on the submitting author’s willingness to wait (WTW) for a publication in a journal with specific characteristics in the field of economic history and they analyzed whether and how this WTW measure varied with journal and personal characteristics. They studied the main effects of the different journal characteristics on the willingness-to-wait for a publication, as well as the interaction effects with the respondents’ characteristics to estimate the different values researchers attach to publications with particular characteristics in this field.

The first paper shows that the department the respondents work at determines most of their research and publication decisions. Hence, working in an interdisciplinary field such as economic history clearly comes at a cost: researchers with a PhD in one discipline who work in a department of another discipline may have to change their research and publication behavior significantly in order to obtain tenure or get promoted. These insights imply that it is inappropriate to use a strategy based on the conventions of a single discipline to evaluate researchers in a multidisciplinary field since it is unlikely that ‘one size fits all.’

The second paper found that respondents’ decisions on manuscript submission were dependent on specific journal characteristics, such as ISI impact factor and standing. Moreover, the respondents’ institution type with which they were affiliated (history versus economics) influenced the respondent’s willingness to wait to a greater extent than their personal characteristics (such as the type of Ph.D. they obtained).

Hence, as requirements with regard to tenure and promotion often differ between departments and disciplines, it is important to develop measurement methods to hire and evaluate researchers working in an interdisciplinary field that have obtained a PhD in one field (such as (economic) history) and end up in an economics department, and vice versa. In this respect it is important to develop and use multidisciplinary assessment strategies to evaluate the quality of researchers in a multidisciplinary field. For instance, it may be advisable to include researchers from both disciplinary backgrounds in selection committees.

Possibilities for future research

Obtaining a larger data set with more respondents can improve the paper. Moreover, checking whether (and making sure that) the dataset is representative for the discipline would be useful (e.g. the division male/female, the share of American, European, Asian, … researchers in this specific field, the share of people with a PhD in economics versus a PhD in history that work in the field of economic history, the division of permanent versus temporary contracts, etc…).

With regard to future research attaining more PhD students would be useful to see whether their research decisions are already formed during their PhD by the publication culture of the department they work at. It is also interesting to analyze whether there is a difference if the PhD student is conducting his PhD on an independent (governmental) scholarship.

A more in-depth analysis about how the researchers perceive the advantages and disadvantages of working in an interdisciplinary environment as well as measuring attitudes and opinions through multidimensional scales can improve insight into the challenges and rewards of performing interdisciplinary research. By identifying drivers and barriers to interdisciplinary research in the field of economic history – for instance by using the framework developed by Siedlok and Hibbert (2014) – advice for research institutions, funding agencies and policy makers could be formulated.

Moreover, the results of these papers only apply to researchers active in the field of economic history. Thus, it would be interesting for future research to investigate whether these findings could be generalized to other (interdisciplinary) fields, such as law and economics or environmental economics.

Stated choice experiments could, for instance, be used to investigate the relative importance of factors influencing the decision to collaborate with a particular type of researcher (gender, rank, national or international) or research institution. They could also help in identifying classes of researchers that show similar collaborative behavior. Moreover, choice experiments could help in analyzing decisions to fund particular projects or to hire particular researchers. Further, they could also be useful in comparing authors’ citation behavior: such as studying the relative importance of different articles’ characteristics (such as familiarity with the authors, standing of the journal, time of publication, content fit, innovativeness, etc.) in the decision to cite a particular source in a text. Finally, choice experiments can be used to analyze the editors’ decision in matching referees with submitted manuscripts, depending on characteristics, such as specialization, maturity and past experience with a particular referee.

Finally, the crisis of 2007 showed that the knowledge of historical facts could maybe not have prevented the crisis, but at least have made the banks more cautious in their decision making process. However, so far, interdisciplinary research – such as economic, financial and business history – is unfortunately still considered by the academic world as a ‘side business’, most often not really belonging to a department, but as a research field floating somewhere in between economics and history. As long as the demands for tenure and the promotion requirements in different departments differ, researchers will be guided in their motivation to work on certain topics by these external evaluation criteria, instead of by the interest of historical facts that need to be researched in order to learn lessons for the future.

Given the value of interdisciplinary research in tackling complex real-life problems, it is important to understand the dynamics of such interdisciplinary research fields. Thus it is interesting to study the formal and informal sets of rules that guide the selection of research topics, collaborations, funding decisions and publication behavior. Such empirical – and repeated – studies allow us to identify positive and negative trends and provide the opportunity to react in a timely manner so that interdisciplinary research is – and continues to be – rewarding for researchers.

Abstract: Comparisons of economic performance over space and time largely depend on how statistical evidence from national accounts and historical estimates are spliced. To allow for changes in relative prices, GDP benchmark years in national accounts are periodically replaced with new and more recent ones. Thus, a homogeneous long-run GDP series requires linking different temporal segments of national accounts. The choice of the splicing procedure may result in substantial differences in GDP levels and growth, particularly as an economy undergoes deep structural transformation. An inadequate splicing may result in a serious bias in the measurement of GDP levels and growth rates.

Alternative splicing solutions are discussed in this paper for the particular case of Spain, a fast growing country in the second half of the twentieth century. It is concluded that the usual linking procedure, retropolation, has serious flows as it tends to bias GDP levels upwards and, consequently, to underestimate growth rates, especially for developing countries experiencing structural change. An alternative interpolation procedure is proposed.

Reviewed by Cristián Ducoing

Dealing with National Accounts (hereafter NA) is a hard; dealing with NA in the long run is even harder…..

Broadly speaking, a quick and ready comparison of economic performance for a period of sixty years or more, would typically source its data from the Maddison project. However and as with any other human endevour, this data is not free from error. Potential and actual errors in measuring economic growth is highly relevant economic history research, particularly if we want to improve its public policy impact. See for instance the (brief) discussion in Xavier Marquez’s blog around how the choice of measure can significantly under or overstate importance of Lee Kuan Yew as ruler of Singapore.

The paper by Leandro Prados de la Escosura, therefore, contributes to a growing debate around establishing which is the “best” GDP measure to ascertain economic performance in the long run (i.e. 60 or more years). For some time now Prados de la Escosura has been searching for new ways to measure economic development in the long run. This body of work is now made out of over 60 articles in peer reviewed journals, book chapters and academic books. In this paper, the latest addition to assessing welfare levels in the long run, Prados de la Escosura discusses the problems in using alternative benchmarks and issues of spliced NA in a country with a notorious structural change, Spain. The main hypothesis developed in this article is to ascertain differences that could appear in the long run NA according to the method used to splice NA benchmarks. So, the BIG question is retropolation or interpolation?

Retropolation: As Prados de la Escosura says, involves a method that is …, widely used by national accountants (and implicitly accepted in international comparisons). [T]he backward projection, or retropolation, approach, accepts the reference level provided by the most recent benchmark estimate…. In other words, the researcher accepts the current benchmark and splits it with the past series (using the variation rates of the past estimations). What is the issue here? Selecting the most recent benchmark results in a higher GDP estimate because, by its nature, this benchmark encompasses a greater number of economic activities. For instance, the ranking of relative income for the UK and France changes significantly when including estimates of prostitution and narcotrafic. This “weird” example shows how with a higher current level and using past variation rates, long-run estimates of GDP will be artificially improved in value. This approach thus can lead us to find historical anomalies such as a richer Spain overtaking France in the XIXth century (See Prados de la Escosura figure 3 below).

An alternative to the backward projection linkage is the interpolation procedure. This method accepts the levels computed directly for each benchmark year as the best possible estimates, on the grounds that they have been obtained with ”complete” information on quantities and prices in the earlier period. This procedure keeps the initial level unaltered, probably being lower than the level estimated by the retropolation approach.

There are two more recent methods to splice NA series derived from the methods described above: the “mixed splicing” proposed by Angel de la Fuente (2014), which uses a parameter to capture the severity of the initial error in the original benchmark. The problem with this solution is the arbitrary value assigned (parameter). Let’s see it graphically and using data for the Maddison project. As it is well known, these figures were recently updated by Jutta Bolt and Jan Luiten van Zanden while the database built thanks to the contributions of several scholars around the world and using a same currency (i.e. the international Geary-Kheamy dollar) to measure NA. Now, in figure 1 shows a plot of GDP per capita of France, UK, USA and Spain using data from the Madison project.

GDP per capita $G-K 1990. France, UK, USA and Spain. 1850 – 2012

The graph suggests that Spain was always poorer than France. But this could change if the chosen method to split NA is the retropolation approach. Probably we need a graph just with France to appreciate the differences. Please see figure 2:

Figure 2 now suggests an apparent convergence of Spain with France in the period 1957 to 2006. The average growth rate for Spain in this period was almost 3,5% p.a. and in the case of France average growth shrinks to 2,2% p.a. Anecdotal observation as well as documented evidence around Spainish levels of inequality and poverty make this result hard to believe. Prados de la Escosura goes on to help us ascertain this differences in measurement graphically by brining together estimates of retropolation and interpolation approaches in a single graph (see figure 3 below):

In summary, this paper by Prados de la Escosura is a great contribution to the debate on long run economic performance. It poises interesting challenges scholars researching long-term growth and dealing with NA and international comparisons. The benchmarks and split between different sources is always a source of problems to international comparative studies but also to long-term study of the same country. Moving beyond the technical implications discussed by Prados de la Escosura in this paper, economic history research could benefit from a debate to look for alternative measures or proxies for long-run growth, because GDP as the main source of international comparisons is becoming “dated” and ineffective to deal with new research in inequality, genuine savings Genuine Savings, energy consumption, complexity and gaps between development and developed countries to name but a few.

Abstract – The Mexican banking system has experienced a large number of transformations during the last 30 years. Although important regulatory changes were introduced in the 1970s, all but a couple of the commercial banks were nationalized in 1982, consolidated into 18 institutions and these were re-privatized in 1992. Shortly after, a balance of payments crisis in 1995 (i.e. Tequila effect) led the government to mount a financial rescue of the banking system which, in turn, resulted in foreign capital controlling all but a couple of institutions. Each and every one of these events was highly disruptive for Mexico’s productive capacity and society as a whole as their consequences have had long lasting effects on politics, regulation and supervision of the financial sector as well as polarising society. Not surprisingly the contemporary narrative accompanying these events has been highly controversial and full of conflicting accounts, with competing versions of events resulting in a long list of misconceptions and “urban legends”.

This entry departs from our usual as it fails to discuss a specific paper circulated by NEP-HIS. Instead I comment and reflect on a public lecture, that is, another common medium we use to communicate our research. The lecture build around two multi volume books and three DVD’s, and was delivered by Enrique Cárdenas (Executive Director of Centro de Estudios Espinosa Yglesias or CEEY) at Bangor Business School’s London campus on 2014-04-07. The actual publications are available, by the way, in hard copy from CEEY’s book store and in electronic version from Amazon.com.mx, as well as following the links to videos below and the link to the full podcast of the presentation above.

The chief aim of this project is to offer new evidence on the process of nationalisation (1982) and privatisation (1991-1992) of Mexican commercial banks. These two episodes of contemporary financial history had important rippling effect on Mexican society, politics and macroeconomic performance. They also had global consequences, first, as they mark the start of the so-called “International Debt Crisis” after Mexico informed of a payment moratorium of sovereign debt in August 1982. Secondly, the ratification of Robert Rubin as the 70th US Treasury Secretary (1995-1999) together with Ernesto Zedillo taking office as 54th President of Mexico (1994-2000), led to a political power vacuum and impasse in economic policy making between the Autumn of 1994 and early Winter of 1995. Known in the vernacular as the “Tequila Crisis”, in December 1994 Mexico devalued its currency and this led to instability in international foreign exchange markets and accelerated the exit of portfolio investments from a number of other countries (most notably Argentina and Brazil). By this point in time, Mexicans had fought hard during negotiations with the US and Canada to keep the banking system out of the North American Free Trade Agreement (NAFTA). But this exception was lost in the aftermath of the “Tequila Crisis” while the subsequent bailout of the newly privatised banks represented a precedent missed by US and British regulators of what would happen, on a much bigger scale, during the 2007-9 financial debacle.

Cárdenas’ analytical framework is based on Stephen Haber’s ideas of co-dependence between political and financial spheres. Cardenas’ evidence-based approach is certainly welcomed. But more so as he tackles head on with the issue of periodicity and method. Specifically whether and how to write accurate and meaningful economic history using of oral sources in the recent past. Revisiting and unpacking method and methodology are topics not far from current debates in business history, as has been portrayed in previous posting in the NEP-HIS blog (click here); the forthcoming panel on oral histories and World War I at theEuropean Association for Banking and Financial History (EABH) meeting in Rüschlikon, Switzerland; recent and forthcoming publications in refereed journal articles by Stephanie Decker and colleagues (see full references below); and JoAnne Yates’s contribution to the edited book by Bucheli and Wadhwani (2014) (as well as their panel on the latter publication during the recent World Business History Conference in Frankfurt). Indeed, one of Cárdenas’ and CEEY trustees’ chief motivations to engage in this research was to listen to what major players had to say while they were still alive.

Cárdenas was not limited to oral sources. He endeavoured to gather surviving but uncatalogued documents as well as the construction and reconstruction of statistical data series to complement historical analysis. Actors were of the highest standing in society including former Presidents, Mexican and foreign Treasury ministers, senior staff at multinational financial bodies, past and present senior bank executives, regulators, economic academic advisors, etc. To deal with historians mistrust of recollection and potential bias, Cárdenas sent in advance a questionnaire split in two sections: one aimed at enabling a 360 degree perspective on key moments; and the second, made out of questions tailored to the participant’s office and status during the event. All participants were informed of who else would take part of the discussions but none were shown others’ responses until all were collected and ready for publication. The risk of being “outed” thus resulted in only a handful of contradictions as participants preferred to declined answering “painful” topics than stretching the “truth”. Meetings were recorded, transcribed, and compared against statistical data. The latter would either strengthen the participant’s argument or was returned to him with further queries. Several iterations resulted in each participant embracing full ownership of individual texts and thus effectively becoming an author of his entry. It’s this process of iterations and guided discussion to which Cárdenas refers to as “testimonials”.

As mentioned, the result of the CEEY’s sponsored research by Cárdenas was two multi book volumes and three documentary videos all of which, as illustrated by the links below to trailers and video documentaries below, have been edited but have no narrators. All views are expressed by the main actors “so that viewers can draw their own conclusions” said Cárdenas during his lecture. By publishing a large number inconclusive outputs based on “testimonials” the CEEY, and Cádernas as his Executive Director, aim to offer a new empirical source for others to include in their own analytical work and come to their own conclusions. Indeed, CEEY’s publications also include a number single author monographs and the commissioning of edited collections by academic authors who have used the testimonials as part of their evidentiary repertoire.

But does Cárdenas have any conclusions of his own? For one, he believes the effort to generate and document events through testimonials and new statistical material results in a much more balanced approach to assess the limited options President López-Portillo had at the end of his term in office. For starters in 1981 he was to nominate on his successor ahead of elections (“el dedazo”). The events that followed were to become the beginning of the end for the one party rule that characterised Mexico during most of the 20th century. At this point in time, Mexico had experienced four record years of strong economic growth. Never seen before and never to be seen since. Its oil production was doubling each year but its international debt was skyrocketing (particularly that of short-term maturity in 1981-2).

But as international oil prices begin to drop, Mexico followed an erratic behaviour (reducing and then raising its oil price) while oil revenues generated 35% of fiscal income and 75% of exports. Moreover, prices for other Mexican exports also fell while a practically fixed-rate parity with the US dollar meant a strongly overvalued peso. A devaluation was followed by a massive increase in salaries. And in the midst of political jockeying and an accelerating worsening of public finance, the President (a lawyer by training) was, according to Cárdenas, to receive conflicting and contradicting information (Cárdenas calls it “deceiving”) on the actual size of the public deficit (which was to double from 7% of GDP in 1981 to 14% of GDP in 1982) as well as the merits of defending the Mexican peso vs US dollar exchange rate (which he publicly claim to “defend like a dog [would defend his master]“.

This conclusion sheds a significant amount of light on the decisions of late former President López-Portillo. As much as also help to better understand the end of some otherwise promising political careers. The narrative of actors bring fresh light to understand the break up between Mexican political and business elites, which eventually results in the end of the one party rule in the presidential election of 2000. It also helps to explain the break up of the rule of law during the next 15 to 20 years in Mexico as well as the loss of the moral authority of its government.

Cárdenas and CEEY have certainly produced a piece that will resist the test of time. They offer a unique effort in creating contemporary financial history while building from oral sources, privileged access to main actors and in this process, developing an interesting method to deal with concerns around potential bias. Given the passion that the topics of nationalisation and privatisation still generate amongst Mexicans and scholars of modern day Mexico, it is understandable that the analysis has emphasised idiosyncratic elements of these events. But somehow links with wider issues have been lost. For one, nationalisation or sequestration of assets (whether of local or foreign ownership) characterised the “short” 20th century. Nationalisation is one side of the coin. The other is public deficit reduction through the sale of government assets. Indeed, the privatisation of Mexican banks between 1991 and 1992 enabled to finance about half of the reduction of Mexican sovereign debt (though the massive rescue that followed practically annulled that reduction). Mexicans were not inmune to Thatcherism to the same extent that a reduction of the state in economic activity (whether real or not) was and is part and parcel of the “second” globalisation.

In summary and in Enrique Cárdenas own words: “Writing current (economic) history is not only possible, but highly desirable!”. We welcome his contributions to enhance empirical evidence around such important events as well as offering a way to systematically deal with oral sources.

Videos

The President’s Decision (1982) – Trailer (with English subtitles)

The President’s Decision (1982) – Full length (in Spanish)

From Nationalisation to Privatisation of Mexican Banks (1982-1991) – Trailer (with English subtitles)

Abstract: The Maddison Project, initiated in March 2010 by a group of close colleagues of Angus Maddison, aims to develop an effective way of cooperation between scholars to continue Maddison’s work on measuring economic performance in the world economy. This paper is a first product of the project. Its goal is to inventory recent research on historical national accounts, to briefly discuss some of the problems related to these historical statistics and to extend and where necessary revise the estimates published by Maddison in his recent overviews (2001; 2003; 2007) (also made available on his website at http://www.ggdc.net/MADDISON/oriindex.htm).

Angus Maddison (1926-2010) left an impressive heritage in the form of his GDP estimates. These consider almost all of the world, from Roman times until our days, and are regularly cited by both specialists and non-specialists for long-run comparisons of economic performance. The Maddison project was launched in March 2010 with the aim of expanding and improving Maddison’s work. One of the first products is the paper by Jutta Bolt and Jan Luiten van Zanden, which aims to provide an inventory while also critically review the available research on historical national accounts. It also aims “to extend and where necessary revise” Maddison’s estimates. This paper was circulated by NEP-HIS on 2014-01-26.

The paper starts by presenting, in a concise but clear way, the reasons that motivated the Maddison’s project and its main goals. It also tells that some issues are left to be the subject of future work, particularly thorny issues left out include the use of 2005 purchasing power parities rather than Maddison’s (1990) ones; and the consistency of benchmarks and time series estimates over countries and ages.

Jutta Bolt

Firstly (and fairly enough, from a ontological perspective) Bolt and van Zanden deal with the possibility of providing greater transparency in the estimates. Instead of presenting the margins of errors of each estimate (which in turn would be based “on rather subjective estimates of the possible margins of error of the underlying data”), the authors, following an advice by Steve Broadberry, choose to declare explicitly the provenance of the estimates and the ways in which they have been produced. This leads to classifying Maddison’s estimates in four groups: a) official estimates of GDP, released by national statistical offices or by international agencies; b) historical estimates (that is, estimates produced by economic historians) which roughly follow the same method as the official ones and are based on a broad range of data and information; c) historical estimates based on indirect proxies for GDP (such as wages, the share of urban population, etc.); d) “guess estimates”.

Jan Luiten van Zanden

Then the article moves on to review and discuss new estimates: although revisions for the nineteenth and twentieth century (mostly falling under the “b” category) are also incorporated, the most important changes come from the pre-industrial era (“c” kind estimates). For Europe, we now have a considerable amount of new work, for several countries including England, Holland, Italy, Spain and Germany (but not for France). The main result is that, from 1000 to 1800 AD, growth was probably more gradual than what proposed by Maddison; that is, European GDP was significantly higher in the Renaissance (above 1000 PPP 1990 dollars in 1500, against 771 proposed by Maddison); hence, growth was slower in the following three centuries (1500-1800), while faster in the late middle ages (1000-1500). For Asia, the new (and in some cases very detailed) estimates available for some regions of India (Bengal) and China (the Yangzi Delta), for Indonesia and Java, and for Japan, confirm Maddison’s view of the great divergence, against Pomeranz revisionist approach: in the late eighteenth and early nineteenth century, a significant gap between Europe and Asia was already present (for instance GDP per capita in the whole of China was 600 PPP 1990 dollars in 1820, as in Maddison; against 1455 of Western Europe, instead of 1194 proposed by Maddison).

New estimates are also included for some parts of Africa and for the Americas, with marginal changes on the overall picture (for the whole of Latin America, per capita GDP in 1820 is set to 628 PPP 1990 dollars, instead of 691). For Africa, however, there are competing estimates for the years 1870 to 1950, by Leandro Prados de la Escosura (based on the theoretical relationship between income terms of trade per head and GDP per capita) on the one side, and Van Leeuwen, Van Leeuwen-Li and Foldvari (mostly based on real wage data, deflated with indigenous’ crops prices) on the other. The general trends of these differ substantially: the authors admit that they “are still working on ways to integrate this new research into the Maddison framework” and thus at the present no choice is made between the two, although both are included in the data appendix.

New long-run estimates are presented also for the Near East, as well as for the Roman world, in this latter case with some differences (smaller imbalances between Italy and the rest of the empire) as compared to Maddison’s picture. The authors also signal the presence of estimates for ancient Mesopotamia, produced by Foldvari and Van Leeuwen, which set the level of average GDP a bit below that of the Roman empire (600 PPP 1990 dollars per year, versus 700), but they are not included in the dataset.

Per capita GDP in Roman times, according to Maddison (1990 PPP dollars)

What can we say about this impressive work? First, that it is truly impressive and daring. But then come the problems. Needless to say Maddison’s guessed estimates is one of the main issues or limitations, and this looks kind of downplayed by Bolt and van Zanden. As pointed out by Gregory Clark, in his 2009 Review of Maddison’s famous Contours of the World Economy:

“All the numbers Maddison estimates for the years before 1820 are fictions, as real as the relics peddled around Europe in the Middle Ages (…) Just as in the Middle Ages, there was a ready market for holy relics to lend prestige to the cathedrals and shrines of Europe (…), so among modern economists there is a hunger by the credulous for numbers, any numbers however dubious their provenance, to lend support to the model of the moment. Maddison supplies that market” (Clark 2009, pp. 1156-1157).

The working paper by Bolt and Van Zanden makes significant progress in substituting some fictitious numbers (d), with indirect estimates of GDP (c), but then in discussing the results it leaves unclear which numbers are reliable, which not, thus still leaving some ground for the “market for holy relics”.

This is all the more problematic if we think that nominally all the estimates have been produced at 1990 international dollars. It is true that there is another part of the Maddison project specifically aiming at substituting 1990 purchasing power parities with 2005 ones. But this is not the point. The real point is that even 2005 PPPs would not change the fact that we are comparing economies of distant times under the assumption that differences in the cost of living remained unchanged over centuries, or even over millennia. This problem, not at all a minor neither a new one − e.g. Prados de la Escosura (2000) − is here practically ignored. One indeed may have the feeling that the authors (and Maddison before them) simply don’t care about the parities they use, de facto treating them as if they were at current prices. For example, they discuss the evidence emerging from real wages, saying that they confirm the gaps in per capita GDP: but the gaps in real wages are usually at the current parities of the time, historical parities, while those in GDP are at constant 1990 parities. If we assume, as reasonably should be, that differences in the cost of living changed over the centuries, following the different timing of economic growth, then the evidence from real wages (at current prices) may actually not confirm the GDP figures (at constant 1990 PPPs). Let’s take, for instance, China. It could be argued that differences in the cost of living, as compared to Europe, were before the industrial revolution, say in 1820, lower than in 1990, given that also the differences in per capita GDP were lower in 1820 than in 1990; hence, prices in 1820 China were relatively higher. The same is true for China when compared to Renaissance or Roman Italy (since prices in 1990 China were arguably significantly lower than prices in 1990 Italy, in comparison with the differences in the sixteenth century or in ancient times). This would mean that real GDP at current PPPs would be in 1820 even lower, as compared to Europe; or that 1820 China would have a per capita GDP remarkably lower than that of the Roman empire, maybe even lower than that of ancient Mesopotamia. Is this plausible?

Abstract: It is often said that history matters, but these words are often little more than a hollow statement. In the aftermath of the Great Recession, the view that the economy is a mechanical toy that can be fixed using a few simple tools has continued to be held by economists and policy makers and echoed by the media. The paper addresses the origins of this unfortunate belief, inherent to neoliberalism, and what can be done to bring time back into public discourse.

“How will the 2008/09 crisis influence historical scholarship? […] The recent crisis reminds us that the policy response is as much a matter of ideology and politics as it is a matter of economics. […] The widespread use of the Great Depression analogy in the recent crisis having reminded us that historical narratives are contested, we will see more explicit attention to the question of how such narratives are formed.” – Eichengreen (2012: 303-304, my own emphasis added)

The unnamed field in the title of Boldizzoni’s paper is no other but economic history, which comes as no surprise for those following the reception of his book The Poverty of Clio. Resurrecting Economic History, a controversial and dismal depiction of the state of economic history published in 2011. In his book, Boldizzoni (research professor of economic history at the University of Turin, and fellow at Clare Hall in Cambridge University) argues that economic history is dead, sickened by the epistemological and methodological faults of cliometrics and the new economic institutionalism (NEI), as well as “a lack of historical sensibility, linguistic skills, and by an amazing level of scholarly illiteracy” amidst her practicants and followers (Boldizzoni 2011b). Boldizzoni claims that if scholars are to “resurrect” economic history, they must draw inspiration from the example set by historians of the Annales school, the historicized socioeconomic modeling of Karl Polanyi, Moses Finley, Alexander Chayanov and Witold Kula, and insights taken from the neighboring disciplines of economic sociology and economic anthropology.

The paper now reviewed problematizes the relationship between history and policy, and more specifically, the interaction of economic history with economic policy, with particular attention to the uses and abuses of history and memory. Standing in the crossing of economic history, the history of economic knowledge and thought, memory studies, and the history of economics and science, Boldizzoni’s paper demonstrates the merits of interdisciplinary and multidisciplinary work, as his approach offers a nuanced, cautious answer to the role of historically-informed policymakers during economic downturns and illuminates what stance should economic historians have in the public sphere. Boldizzoni argues that history “is both a search for meaning and an injection of antibodies:” honest economic historians should necessarily denounce poor scholarship that mobilizes and abuses the past for political purposes in the present, and inform their audiences that the economic system is a “historically determined […] social construction, a man-made environment.” (Boldizzoni 2013: 10).

Abstract: The paper discusses some evidence, based on a review of new literature on economic history, about what is referred to as the Sen-hypothesis, that increasing human agency (of both men and women) is a key factor in economic development. It briefly discusses various dimensions of agency (or its absence): slavery (as the absolute suppression of human agency), access to markets, agency concerning marriage, and political participation. This concept perhaps also allows economic historians to move beyond the historical determinism that is central to much recent work in this field.

This paper distributed by NEP-HIS on 2012-01-03 raises a challenge to economic historians: how can we improve our current explanations of differential development and escape the common rhetorical places of path dependency and institutional persistence in our explanations of material stagnation and change? By placing human agency of men and women in the center of our stories, says Jan Luiten van Zanden, in the form advocated years ago by Amartya Sen in his best-selling book Development as Freedom.

Amartya Sen

It might be useful to remember Sen’s definition of agency, a concept that diverged from the usual meaning of the term in economics:

The use of the term “agency” calls for a little clarification. The expression “agent” is sometimes employed in the literature of economics and game theory to denote a person who is acting on someone else’s behalf (perhaps being led on by a “principal” and whose achievements are to be assessed in the light of someone else’s (the principal’s) goals. I am using the term “agent” not in this sense, but in its older -and “grander”- sense as someone who acts and brings about change, and whose achievements can be judged in terms of her own values and objectives, whether or not we assess them in terms of some external criteria as well. This work is particularly concerned with the agency role of the individual as a member of the public and as a participant in economic, social and political actions (varying from taking part in the market to being involved, directly or indirectly, in individual or joint activities in political and other spheres) (Sen 1999: 18-19, my own emphasis added).

Zanden’s reading of agency in Sen is “the capacity for autonomous decision making” that ultimately drives “economic and social-political change” (Zanden 2011: 4). Agency is also a synonym of “participation, or autonomy” (Zanden 2011: 5). But two questions remain. How does agency affect economic change? How does freedom impact agency? Sen responds:

Development as Freedom

Expansion of freedom is viewed both as the primary end and as the principal means of development. Development consists of the removal of various types of unfreedoms that leave people with little choice and little opportunity of exercising their reasoned agency. The removal of substantial unfreedoms is constitutive of development (Sen 1999: xii).

Zanden advances the usefulness of Sen’s framework and formulates what he calls the dual Sen hypothesis, this is, if “development is defined as freedom [… that] freedom -or rather -agency- is an important precondition and driver of long-term economic and socio-political change” (Zanden 2011: 5).

The second part of the “Sen hypothesis”, agency as a determinant of historical change, can be tested with proxy variables such as the gross domestic product or the human development index. However, what is behind these indicators? Zanden advances a suggestive explanation drawn from the new growth theory of Paul Romer and Robert Lucas: human capital is the crucial determinant of economic growth and human development. Human capital is embedded in the other variables for “one has to possess the right skills -the human capital- to really participate in markets, political events and the civil society” (Zanden 2011:5).